Coal Age Magazine - For more than 100 years, Coal Age has been the magazine that readers can trust for guidance and insight on this important industry.
Issue link: https://coal.epubxp.com/i/640014
n e w s c o n t i n u e d Christmas holiday hiatus. But when the St. Louis-based company's Deer Run longwall mine, which was indefinitely idled because of a stubborn carbon monoxide problem that has dogged the mine since last March 26, will be running again remained a mystery. Foresight's M-Class Mining/Sugar Camp Energy and Mach Mining/Pond Creek longwall mines in Franklin and Williamson counties, respectively, resumed producing coal in early January after being down for a couple of weeks in December, as did the Macoupin Energy/Shay No. 1 continuous miner operation in Macoupin County. Illinois coal officials said the lengthy December shutdown apparently was an attempt by Foresight to trim stockpiles. Gary Broadbent, assistant general counsel and spokesman for both Foresight and Murray Energy Co., confirmed all of Foresight's Illinois mines were operating again except for Deer Run, also known as Hillsboro, in Montgomery County. But he did not comment on the reason for the holiday break. Murray Energy, based in St. Clairsville, Ohio, acquired a major ownership stake in Foresight almost a year ago. As of early February, Foresight had not publicly released p r o j e c t e d t o n n a g e f i g u r e s f o r 2 0 1 6 . B u t u n l e s s D e e r R u n reopens soon, they are likely to be less than its nearly 22 million tons of output in 2014. Mach Mining, Shay and Deer Run pro- duced about 9.5 million tons in 2015, according to the federal Mine Safety and Health Administration (MSHA). Deer Run's 1.9 million tons were significantly below its 5.5 million-ton total in 2014. Final 2015 numbers for Sugar Camp were not yet avail- able. The mine turned out about 9 million tons in 2014. Complicating the public uncertainty over Deer Run has been the relative dearth of information released by the compa- ny about the mine. Except for an occasional snippet of infor- m a t i o n v o l u n t e e r e d b y F o r e s i g h t , M S H A a n d t h e I l l i n o i s Department of Natural Resources have provided most of the regular updates surrounding Deer Run. Foresight, for instance, has been hesitant to refer to the probable cause of the prolonged elevated CO levels as a mine fire, though state and federal officials have indicated a stub- born fire or "hotspot" in a mined-out area behind the longwall is the most likely culprit. In early January, Murray Energy confirmed about 100 Deer Run miners had been laid off indefinitely. The mine had about 104 employees in the fourth quarter of 2015, MSHA figures show, down from about 124 in early 2015. MSHA spokeswoman Amy Louviere said her agency had a p p r o v e d a r e q u e s t b y F o r e s i g h t t o p u m p w a t e r i n t o D e e r Run's shaft "to seal the shaft. "The water will act as a seal so that when they remove the fan housing from the top of the shaft, the inert atmosphere (nitrogen) will not escape." D e s p i t e D e e r R u n ' s C O w o e s , F o r e s i g h t i s p r o p o s i n g a 7,731-acre expansion of the mine, according to state regula- tors. The expansion would be in a different area of the mine not affected by the elevated CO levels. T h e I l l i n o i s E n v i r o n m e n t a l P r o t e c t i o n A g e n c y ( I E P A ) , meanwhile, has extended an emergency underground injec- t i o n c o n t r o l w e l l p e r m i t t o S u g a r C a m p E n e r g y t h r o u g h December 31, 2016. The emergency permit, issued on May 20, 2014, was to have expired on May 20, 2015, but was extended the first time through December 31, 2015. IEPA said it initially granted the permit "to allow the appli- cants to construct and eventually operate two UIC wells on a temporary basis in an effort to manage an unexpectedly large volume of groundwater infiltrating the mine, putting miners at risk. If discharged to surface waters, this wastewater would violate the state's water quality standards for chloride and dis- solved solids." Foresight also was facing an early February deadline to reach a negotiated settlement with its creditors to restructure m o r e t h a n 7 5 % o f i t s m o r e t h a n $ 6 0 0 m i l l i o n o f d e b t . I n December, a Delaware court ruled the Murray Energy transac- tion triggered an agreement with Foresight's unsecured bond- holders, enabling them to seek early repayment. I t w a s n o t i m m e d i a t e l y c l e a r w h a t i m p a c t , i f a n y , Foresight's failure to reach a satisfactory agreement with the creditors might have on the company's mining operations. LG&E;'s Coal Burn Increases in January January's colder weather was music to the ears to officials of Kentucky's largest electric utilities, Louisville Gas & Electric (LG&E;) and Kentucky Utilities (KU), who saw all of their coal- b u r n i n g g e n e r a t i n g u n i t s r u n n i n g a g a i n a f t e r s o m e w e r e "backed down" because of December's mild temperatures and low natural gas prices. The higher burn also was cheered by coal producers, most- ly in the high-sulfur Illinois Basin, that sell the 14 million-15 million tons of steam coal consumed annually by the sub- sidiaries of Pennsylvania's PPL Corp. Michael Dotson, fuels manager for LG&E; and KU, said the increased burn would not necessarily, or immediately for that matter, translate into additional coal purchases by the two utilities. That is because they are still working through a large, though unspecified, coal inventory backlog that has persisted since last year. Dotson was hoping the winter of 2015-2016 would feature more cold weather in February and March. Most weather pro- jections, were calling for somewhat warmer than normal tem- peratures in Kentucky for the remainder of winter. Weather — both the winter and upcoming summer — likely will dictate whether LG&E; and KU return to the spot coal market in 2016. If temperatures are mild, Dotson does not expect to buy additional coal this year. If they are more extreme, cold in February and March and hot this summer, then coal purchases are possible. 8 www.coalage.com February 2016 LG&E; and KU see their coal burn increasing at power plants.